City of Kyiv $550 million eurobond restructuring

Overview:

• The government of Ukraine's capital, City of Kyiv, has restructured two eurobonds totaling €550 million, cutting the city's debt by around $449 million.  
• The restructured bonds were Kyiv's outstanding $250 million 8% notes due 2015 and its $300 million 9.375% notes due 2016.
• The notes were exchanged for sovereign guaranteed bonds and securities linked to the country's economic growth.
• Under the new deal the bonds, on which the holders accepted write downs of 25%, had the maturities extended by four years and coupons revised to 7.75%.
• Earlier in 2015, Ukraine reached an agreement with to restructure its $18 billion private creditor debt. 
• Ukraine's economy never recovered from the financial crisis, and recently these difficulties have been exacerbated by a period of conflict. Ukraine's previous, corrupt, regime was ousted and a subsequent war between those seeking reform and domestic separatists encouraged and reinforced by Russia, still continues. The country's long recession has scared off banks and investors, leaving the government and most businesses unable to service debts.    
• Goldman Sachs was dealer manager on the bond restructurings.

Ben Naylor - Regional editor